3. value: 10.00 points ICE Drilling Inc.'s balance sheet information and income statement are as follows: ICE Drilling Inc. Income Statement For Year Ended December 31, 2017 Sales Cost of goods sold $1,110,000 552,000 $ 558,000 Gross profit Operating expenses: Depreciation expense Other expenses $ 34,000 304,160 Total operating expenses Profit from operations Loss on sale of equipment 338,160 219,840 9,880 $ Profit before taxes Income taxes 209,960 25,560 Profit $ 184,400 ICE Drilling Inc. Comparative Balance Sheet Information December 31 2017 2016 Cash $103,680 $163,640 Accounts receivable 137,600 103,160 Merchandise inventory 605,200 557,600 Prepaid expenses 11,960 14,000 Equipment 355,680 238,400 Accumulated depreciation 69,560 90,560 Accounts payable 194,720 283,640 Current notes payable 14,400 6,000 Notes payable 210,000 118,800 Common shares 442,800 342,000 Retained earnings 282,640 235,800 Additional information regarding ICE Drilling's activities during 2017: 1. Loss on sale of equipment is $9,880. 2. Paid $68,680 to reduce a long-term note payable. 3. Equipment costing $97,000, with accumulated depreciation of $55,000, is sold for cash. 4. Equipment costing $214,280 is purchased by paying cash of $54,400 and signing a long-term note payable for the balance. 5. Borrowed $8,400 by signing a short-term note payable. 6. Issued 10,080 common shares for cash at $10 per share. 7. Declared and paid cash dividends of $137,560. Required: Prepare a statement of cash flows for 2017 that reports the cash inflows and outflows from operating activities according to the indirect method. (List any deduction in cash and cash outflows as negative amounts.) Required: Prepare a statement of cash flows for 2017 that reports the cash inflows and outflows from operating activities according to the indirect method. (List any deduction in cash and cash outflows as negative amounts.) ICE DRILLING INC. Statement of Cash Flows For Year Ended December 31, 2017 Cash flows from operating activities: Adjustments to reconcile profit to net cash inflows from operating activities: Cash flows from investing activities: Cash flows from financing activities: Analysis Component: Merchandise Inventory, Prepaid Expenses, Notes Payable, and Common Shares are some of the accounts that changed during 2017. Indicate what transactions likely caused each of these accounts to increase and/or decrease. (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.) Merchandise inventory: increases caused by the purchase of merchandise decreases caused by the purchase of merchandise ? decreases caused by the sale of merchandise increases caused by the sale of merchandise Prepaid expenses: increases caused by the purchase of prepaid items, i.e., such as the payment of rent or insurance in advance decreases caused by the use of prepaid expenses decreases caused by the purchase of prepaid items, i.e., such as the payment of rent or insurance in advance increases caused by the use of prepaid expenses Notes payable: increases caused by the issuance of debt (borrowing) ? decreases caused by principal payments decreases caused by the issuance of debt (borrowing) increases caused by principal payments deceases Causuwy lile use UI piepalu Capelises decreases caused by the purchase of prepaid items, i.e., such as the payment of rent or insurance in advance 7 increases caused by the use of prepaid expenses Notes payable: increases caused by the issuance of debt (borrowing) decreases caused by principal payments decreases caused by the issuance of debt (borrowing) 2 increases caused by principal payments Common shares: increases caused by the issuance of shares and/or share dividends decreases caused by the repurchase and/or cancellation of shares decreases caused by the issuance of shares and/or share dividends increases caused by the repurchase and/or cancellation of shares